Government Holds Public Hearing on Timaep Incident Institutional Improvement to Gather Opinions on Legislative Amendment Proposal

The government has begun gathering opinions from stakeholders such as academia and economic organizations on the proposed legal amendments aimed at preventing a recurrence of the Timof (Timon·Wemakeprice) incident.

The Fair Trade Commission and the Financial Services Commission announced that they held a public hearing on the 23rd at the Korea Press Center in Jung-gu, Seoul, to discuss institutional improvements to prevent a recurrence of the "Timon·Wemakeprice incident."

Earlier, the Fair Trade Commission stated that to prevent a recurrence of the Timof unsettled payment incident, it plans to amend the law to classify online intermediary transaction platforms above a certain scale as "large-scale retailers," applying mandatory provisions such as payment settlement and separate management.

However, considering industry concerns, multiple proposals with different legal application criteria and regulatory contents were presented, and a final plan will be prepared later. The public hearing was held to collect opinions from various sectors on the multiple proposals prepared by the Fair Trade Commission.

In addition to academia and economic organizations, various stakeholders directly affected by the legal amendments, including online intermediary transaction operators, tenant small business owners, and electronic payment gateway (PG) companies, attended the hearing.

Nam Dong-il, Secretary General of the Fair Trade Commission, pointed out in his opening remarks, "The current Large-Scale Distribution Business Act mainly regulates traditional retail businesses and does not sufficiently reflect the reality that online intermediary transactions have become an important part of distribution."

He continued, "We are promoting legal amendments to ensure online intermediary transaction platforms comply with payment settlement deadlines and impose obligations such as separate management of sales proceeds. We will prevent the recurrence of unsettled payment incidents and protect the rights and interests of tenant businesses to establish a sound trading order in the online intermediary transaction market," he emphasized.

Kwon Dae-young, Secretary General of the Financial Services Commission, evaluated, "This incident showed that if the settlement funds paid by consumers are not properly managed, not only the transaction parties such as consumers and sellers but also all stakeholders involved in the payment process, including PG companies and card companies, can suffer damage."

He added, "The proposed institutional improvements, including the obligation for 100% separate management of settlement funds and the introduction of practical supervisory measures to induce sound management of PG companies, will be an opportunity to safely improve the online payment system and restore trust in the payment process."

In the first part of the public hearing, Sun Jung-gyu, Corporate Cooperation Policy Officer of the Fair Trade Commission, presented on the amendment plan for the Large-Scale Distribution Business Act, followed by designated discussions involving experts, economic organization representatives, and industry workers. Director Sun explained the purpose of the amendment, the background for presenting multiple proposals, and the grounds for each proposal.

The industry side argued that it is necessary to be cautious with regulations to maintain the innovation momentum of the online intermediary transaction platform ecosystem and allow emerging small and medium platforms to grow.

They emphasized the need to ease the intensity of regulations even if new rules are introduced. On the other hand, tenant small business owners pointed out that lax regulations could lead to a recurrence of the Timof incident and argued for stronger regulations.

The Fair Trade Commission and the Financial Services Commission stated, "We plan to promptly proceed with legislation by carefully reviewing the balanced opinions of experts and stakeholders collected through the public hearing."